Pakistan Stock Exchange: After peace talks between America and Iran failed in Islamabad, US President Donald Trump ordered a blockade of Iranian ports. Due to this, huge fluctuations were seen in Pakistan Stock Exchange (PSX).

According to a report by Dawn, Pakistan’s benchmark KSE-100 index fell sharply during Monday’s trading. KSE-100 fell by more than 5000 points in early trade and reached an intraday low of 161,638.07 at around 9:50 am. Whereas its previous closing was at 167,191.37. Later, the index recovered some of the losses and climbed above 163,000 after fluctuating around the 162,000 level and touched the intraday high of 163,429.78 at around 11 am.

Why was there panic in Pakistani stock market?

President Trump ordered a naval blockade of Iranian ports after 21-hour marathon talks in Islamabad failed to reach a ceasefire and Iran’s decision not to give up its nuclear weapons. Due to this, the possibility of supply stoppage at Hormuz has increased again. Due to this, investors came under stress, which also affected Asian markets like Hang Seng, Nikkei.

How important is Hormuz for Pakistan?

Pakistan imports about 80-85 percent of its crude oil requirement from Gulf countries like Saudi Arabia, Kuwait, United Arab Emirates, Qatar. Apart from this, almost 99 percent of the LNG for Pakistan is also supplied by UAE and Qatar. If the US naval blockade remains in force for a long time, then Pakistan’s bill on petroleum imports may reach $3.5 billion to $5 billion.

If the international oil price increases by $10 per barrel, Pakistan’s annual import bill may increase to $1.8-2 billion. Due to this, domestic inflation may increase by 15-17 percent. Pakistan is also dependent on imported oil and gas for its electricity needs. Due to supply stoppage, work in many industries may come to a halt. The duration of power cut may also increase.

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